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Judge Throws Out SunCal’s $100 million Claim Against City of Alameda

This morning, the City of Alameda announced that a federal judge has thrown out a lawsuit claim by former would-be Alameda Point developer SunCal, which had sued the city for $100 million in lost profits.

According to a prepared statement from Alameda City Hall, United States District Court Judge Charles Breyer dismissed the suit, ruling “that future anticipated profits could not be recovered under California law because there had been no agreement or approval as to the development plan. He stated that future profits would be speculative since it was not certain that there would have been an agreement on the development plan.”

SunCal had threatened to bankrupt the City of Alameda over its dismissal from the Alameda Point project.

“This decision significantly reduces the potential City exposure in the matter,” said City Attorney Janet Kern.

However, the city is not off the hook yet, as the court must yet rule on SunCal’s claims against the city for $17 million in pre-development expenses.

The case continues through next week and beyond.

2 comments to Judge Throws Out SunCal’s $100 million Claim Against City of Alameda

  • carol

    Woo-Hoo!!! $100 million down, only $17 million to go!

  • Vania

    Back when this lawsuit started, SunCal’s self-proclaimed hot shot Century City lawyers publicly stated that they were taking the case on a contingency. It might well be that this Federal judge will ultimately say to SunCal “You signed a contract with the City where you took the economic risk of not getting a project approved, and then on top of it you agreed that you couldn’t recover money damages, so you can’t recover the $17 Million either.” That last $17 Million doesn’t look like a sure win to me. I wonder if those hot show lawyers’ zeal in trying to vindicate SunCal’s rights will be diminished now that it looks like an unlikely best their cut would only be 40% of $17 Million? Under most contingency fee agreements, the lawyers can simply quit/withdraw if they have doubts about their chances of winning a case. So stay tuned for further developments.

    If SunCal’s contingency fee lawyers do bail out of the Alameda case, the case may die a natural death. I could be totally off the mark, but SunCal’s owner Bruce Elieff made a favorable settlement with Lehman Brothers, over the 17 or so disastrous Lehman/SunCal projects, where Lehman allegedly stiffed SunCal out of money to process land use entitlements and build infrastructure. In the settlement deal with Lehman, Lehman agreed to take over Mr. Elieff’s $220+/- liability on infrastructure lien free completion bonds, and SunCal is walking away from Oak Knoll (Oakland) and all of the other Lehman/SunCal projects except for a few tiny ones. That resolution certainly improved Mr. Elieff’s and SunCal’s creditworthiness. I would be expecting them to be using their available cash to go out and buy already entitled subdivision land, investing for the future, rather than spending cash to pay lawyers fees to continue to “tilt at windmills”.

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